Cross-cultural management is examining human behaviour within organizations from an international perspective.
Cross-cultural management describes organizational behaviour within countries and cultures; compares organizational behaviour across countries and cultures; and seeks to understand how to improve the interaction of co–workers, managers, executives, clients, suppliers, and alliance partners from around the world.
Thus here, we can experience that in present day’s scenario where people employed in multinational companies (MNCs) are from various cultures and each and every employee is different in his attitudes, practices, behaviour and values. Thus it becomes very difficult for a manager to manage his subordinates who are diverse in their culture. There emerges need to understand and gain knowledge on different cultures. It helps employees to know each others’ cultures and languages. This helps, inturn, in keeping the employees integrated in the organization so that they cooperate with each other in attaining the goals of the organization.
Cross-cultural management focuses on reducing the cross-cultural differences and barriers and creating cross-cultural awareness in order to have better communication and cooperation at the workplace. It is the toughest job of a cross-cultural manager to keep his employees involved in the tasks by keeping their differences aside. This will not only help in retaining the employees but also to stay in the organization for a longer period of time. Hence, it is very necessary to recognize the business culture, management values and methodologies across the globe. Every country follows a different way of management style and it becomes difficult for an international manager to manage various cultures.
Cross Cultural Differences:
One of the main tasks of management is solving of problems that appear at encountering individual company and national cultures. Managers of international companies often face challenges of cultural differences. There are three sources of cultural differences.
- Corporate company culture:
The corporate company culture elements are such as history of the company, company’s experience, leadership and dominant coalition, ownership, stage of development and business diversity.
- Professional industry culture:
The professional industry culture comprises of two elements; functional orientation and industry norms. Functional orientation includes marketing, finance, engineering, research and development functions. Industry norms include technology, change, key success factors, and types of customers.
- National ethnic culture:
National ethnic culture includes elements such as country history, education, social organization, religion and philosophy.
Dimensions of Cross-Cultural Differences:
The major cultural differences could be categorized into two major dimensions. One was given by Geert Hofstede and the other by Fons Trompenaars. Both approaches propose a set of cultural dimensions along which dominant value systems can be ordered. These value systems affect human thinking, feeling, and acting, and the behavior of organizations and institutions in predictable ways. The two sets of dimensions reflect basic problems that any society has to cope with but for which solutions differ. They are similar in some respects and different in others. The dimensions can be grouped into several categories:
1) Relations between people:
Two main cultural differences have been identified. Geert Hofstede distinguishes between individualism and collectivism. Fons Trompenaars breaks down this distinction into two dimensions: Universalism versus Particularism and individualism versus communitarianism.
2) Motivational orientation:
Societies choose ways to cope with the inherent uncertainty of living. In this category Hofstede identifies three dimensions: Masculinity versus femininity, amount of uncertainty avoidance, and power distance.
3) Attitudes toward time:
Hofstede distinguishes between a long-term versus a short-term orientation. Trompenaars identifies two dimensions: sequential versus synchronic and inner versus outer time.
The cultural differences could in any of the above mentioned dimensions.
In his original work, Hofstede identified four key dimensions which impact on natural cultural differences. These are:
- Individualism/collectivism: This dimension reflects the extent to which individuals’ value self-determination as opposed to their behaviour being determined by the collective will of a group or organization.
- Power-distance: At the core of this dimension lies the question of involvement in decision making. In low power-distance cultures, employees seek involvement and have a desire for a participative management style. At the other end of this scale, employees tend to work and behave in a particular way because they accept that they will be directed to do so by the hierarchy or the organization.
- Uncertainty avoidance: This dimension is concerned with employees’ tolerance of ambiguity or uncertainty in their working environment. In cultures which have high uncertainty avoidance, employees will look for clearly defined, formal rules and conventions governing their behaviour.
- Masculinity/femininity: This is possibly the most difficult dimension to use in an organization context. In practice, the difficulty is more to do with terminology and linguistics, in Hofstede’s work the dimension related to values. In highly “masculine cultures” dominant values relate to assertiveness and material acquisition. In highly “feminine cultures” values focus on relationship among people, concern for others and quality of life.
Strategies for managing Cross-Cultural Differences:
As the managers and the employees in a multinational organization gradually understand the dimensions and differences, it is the duty of both managers and the employees to adopt the strategies to keep the diversity at bay. Following are the strategies which help us to overcome the obstacles of cross-cultural differences;
- Good knowledge of foreign culture:
The first strategy is acknowledging and admitting the existence of differences between cultures. This mainly includes differences in perceptions, interpretations and evaluations of social situations and people who create them and act within them. These differences than have to be named, described, explained and understood. Recognition of the culture of a partner is considered to be the first condition of mutual understanding and good cooperation. This step is definitely neither common nor easy.
- Respect of a foreign culture:
Respect of a foreign culture means most of all accepting their differences without any judgment. It is not possible to claim that a certain culture is more perfect, “better” than another culture. Cultures are different and for their members they represent optimum to manage life situations in conditions they have been living in for a long time.
- Helpful steps in the relationship to a foreign culture:
The next strategy of the recommended process should be the effort to find common solution, mutual understanding and simplification of the complicated and demanding process of behaving in different cultural conditions. These helpful steps in no case mean that the participating partners should give up their cultural background, but it suggests that they should use their knowledge of own culture to gain knowledge about the partner’s culture, which can be quite easy after all. Very often it is enough to sacrifice something that is not too important for us, but it means a lot for another culture. The main condition is a very good knowledge of partners and their cultural environment, though.
- Ignore the cultural differences:
In this strategy, a stage comes where the managers ignore the differences. It later becomes irrelevant as the managers and employees would be having a good understanding about each others’ cultures and practices as earlier they would learn to respect the cultures. The employees and managers feel in this type of strategy that “our way is the only way” as it is also practices in parochial type of organizations. The ignorance of diversity precludes effective management of cultural differences and also precludes the possibility of minimizing negative impacts and increasing positive impacts of diversity.
- Minimize differences:
In this strategy, the managers recognize cultural differences but only as a source of problems. This strategy is mostly adopted by ethnocentric organizations. In such organizations, managers try to reduce the problems of differences by reducing cultural diversity. They do not think about advantages of diversity. They try to either select a culturally homogenous workforce or attempt to socialize all employees into behaviour patterns of dominant culture.
- Managing differences:
This strategy is adopted by synergistic organizations. These organizations recognize the impacts of cultural differences that lead to both advantages and disadvantages. The managers in synergistic organizations believe that “our way and their way of believing and managing differ, but neither is superior to other”. In this case, the managers and employees minimize potential problems by managing the impacts of cultural differences, not by minimizing the differences themselves. Similarly, managers maximize the potential advantages by managing impacts of cultural differences, rather than by ignoring them. The organizations which use the strategy of managing differences train their managers and employees to recognize the cultural differences and to use cultural differences to create advantages for the organizations.